Nigeria may be heading for another wave of inflation as global crude oil prices surge past the $100 per barrel mark, driven by the escalating conflict between the United States and Iran.
This development has heightened concerns over rising petrol prices, increased transport fares and a higher cost of living.
However, the Federal Government is expected to benefit from a substantial increase in oil revenue, as higher crude prices translate into earnings well above the 2026 budget benchmark.
Nigeria’s Bonny Light crude traded above $100 per barrel for the first time since May, amid fears that the Middle East crisis could disrupt global oil supplies.
The region accounts for nearly one-third of global crude exports, and any prolonged instability is expected to keep prices elevated.
Though the price surge offers a fiscal windfall, economists warn that the benefits could be offset by the impact on households, as deregulation of the downstream petroleum sector means higher international crude prices are likely to translate into increased premium motor spirit, PMS, prices.
The 2026 Federal Government budget was based on a crude oil benchmark of $64.85 per barrel, daily production of 1.84 million barrels, and an exchange rate of ₦1,400 to the US dollar.
At current prices, Nigeria is earning about $35 more per barrel than projected, potentially generating billions of naira in additional revenue, provided production and exports remain stable.
But, such gains may be limited by lower-than-targeted output.
The Nigerian Upstream Petroleum Regulatory Commission, NUPRC, said that the country’s current oil production stands at about 1.7 million barrels per day, including condensates.
Meanwhile, the likely hike in the price of petrol prices and the attendant hike in the cost of living is the immediate concern of the citizenry.
As crude prices rise on the international market, the cost of importing refined petroleum products also increases, pushing up landing costs and forcing marketers to adjust pump prices.
Higher fuel prices are expected to trigger fresh increases in transport fares, with ripple effects on the prices of food, manufactured goods and other essential commodities.
Commenting on the development, the Managing Director of Petroleumprice.ng, Jeremiah Olatide, said the downstream petroleum sector has become increasingly volatile.
Noting that although the resumption of fuel loading by Dangote Petroleum Refinery in naira at ₦1,215 per litre initially raised expectations of lower pump prices, Olayide added that the renewed spike in global crude prices had reversed that outlook.
He said, “With the resumption of loading by Dangote Petroleum Refinery in naira at ₦1,215 per litre on Wednesday, we expected fuel importers to reduce prices, and some actually did.
“However, the sudden spike in crude oil prices due to the Middle East crisis has disrupted that trend.
“We should expect more price instability in the coming weeks.”
Also speaking on the development, the National President of the Oil and Gas Services Providers Association of Nigeria, OGSPAN, Mazi Colman Obasi, said that although widespread price increases had yet to be implemented by depots and filling stations, the effects would soon be felt across the economy.
He warned that the consequences would be far-reaching for households, businesses and the broader economy, once operators across the petroleum value chain adjust their prices.
Data from Petroleumprice.ng showed that before the latest surge in crude prices, several depots in Lagos, Warri and Calabar had reduced loading prices to attract customers, while prices in Port Harcourt remained largely unchanged.